AFTER five years of deficits in the underlying result – which determines whether council’s making enough money to pay for expenses – the Bass Coast Shire Council has achieved a $2.8 million surplus.
And the operating surplus is $12.51 million, but it includes a few “extraordinary” items which council didn’t account for, themselves budgeting for a $630,000 surplus.
In its operating result, council included $6.685 million in non-monetary developer contributed assets – such as donated land and parks – and a $2.97 million grant council received for the 2017-18 year by the Federal Government.
Council CEO Paul Buckley acknowledged the $12.51 million is swayed by those two additions.
“Whilst the result is influenced by significant additional income in the form of developer contributed assets and early payment by the Commonwealth Financial Assistance Grants, when comparing budget to actual results – excluding those extraordinary items – the outcome is approximately $3.5 million or 4.9 per cent positive to budget,” he said at a council meeting on Wednesday.
The increase in revenue came from a $500,000 saving in employee costs, a $700,000 decrease in materials and services costs, and an increase in revenue, Mr Buckley added.
The increase in revenue included $600,000 generated from higher levels of fees and charges.
The $2.97 million grant is an exception because the grant doesn’t come into effect until the 2017-18 year, although it was given to council during 2016-17, Phillip Island resident Peter McMahon pointed out following the meeting.
Peter attends every council meeting and is the secretary of the Phillip Island Aquatic Group, and works with Bass Coast Ratepayers and Residents Association President Kevin Griffin.
Peter also queried council’s efforts to bring forward $9 million worth of projects from the 2015-16 year to 2016-17.
“They say this is more open, but I don’t believe it is,” he said.
“Maybe in some circles for financial people to look at, but not for the average person.”
The $6.685 million in non-monetary assets includes infrastructure in 18 sub-divisions completed and handed over to the Bass Coast Shire Council to manage.
A spokesperson for council said the infrastructure includes public drainage systems, roads, paths, bridges and open space assets such as park furniture and recreational areas.
Accountant Cr Les Larke said local governments valuing donated infrastructure (non-monetary assets) was a “quirk” of the annual reports because while it is included in the surplus, it’s actually an asset.
“For example, developers may go beyond just a little bit of land for an estate.
“They may decide to sweeten the deal for the community by doing a community building, car park, paving or some roads.”
Overall though, he was pleased with the $2.8 million underlying surplus.
“We had four to five years of underlying losses in the previous regime but we’ve stopped the haemorrhaging,” he said.
“It is a big turn around.”
Cr Larke also revealed at the council meeting on Wednesday that he had sent a question to the Victorian Auditor-General Andrew Greaves about local government accounts, but the question is confidential.
Cr Larke voted against the motion to adopt the 2016-17 Annual Report, waiting to hear back from the Auditor-General.